Anyone following new Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) CEO Haim Romano cannot but be impressed by one prominent aspect of his work: he knows what he wants. He knows how customer service should work, he knows what shareholders and the controlling shareholder demand, and he knows what he should give customers. When you know where you are going, the tactics to get there are clear, as are the objectives.
The bizarre tale behind the firing of hundreds of employees at the Orange franchisee began six months ago, when Partner hired 600 new employees. Under then CEO Yacov Gelbard and VP marketing Yaakov Kedmi, the mobile carrier was pursuing a strategy of increasing its market share by recruiting as many subscribers as possible, after the Ministry of Communications abolished exit fines.
Partner had a latent assumption that it had the strongest brand, which would of itself bring in the masses, if only the shackles tying them to the company's rivals were removed. The assumption was wrong. Partner's brand was weak because customers seeking the lowest price could also abandon it in favor of a rival offering just as good a deal.
In other words, Partner dragged the whole mobile market down without achieving anything. Moreover, new competitors have not yet entered the market, so there was no real reason to launch a price war so soon.
Another thing that is completely different about Romano is that he won't fight the Ministry of Communications - U-turn from his predecessor's policy. Romano will contest, he will try to explain, but he won't get into the kind of confrontations that characterized his predecessors, who took their cue from Partner's controlling shareholder, Ilan Ben-Dov.
Romano understands that Partner must not attack the regulator's actions, which the public perceives as essential and good, because if he does, the company's negative image will be enhanced. That is the lesson that Partner will take with in its future struggles with the Ministry of Communications.
Romano also found a company with a poor corporate atmosphere. Partner did not like Gelbard; he was considered an outsider, as the former CEO of rival Pelephone Communications Ltd. This was symbolic, but symbols have meanings. Romano, in contrast, is seen as one of Partner's own. The mass firings he is instituting won't help, but there is reason for optimism about the future.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2011
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